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Reversal of Fortune for Political Incumbents: Evidence from Oil Shocks

Author

Listed:
  • Arezki, Rabah

    (African Development Bank and Harvard’s Kennedy School of Government)

  • Djankov, Simeon

    (London School of Economics and Peterson Institute for International Economics)

  • Nguyen, Ha

    (World Bank)

  • Yotzov, Ivan

    (University of Warwick & CAGE)

Abstract

Using a new dataset of 198 national elections across 48 democracies, this paper is the first to systematically examine the effects of oil price shocks on incumbents’ political fortunes in developed oil-importing countries. We find that oil price increases systematically lower the odds of reelection for incumbents and increase the likelihood of changes in the ideology of the incoming government. These shocks are found to operate through lowering consumption growth.

Suggested Citation

  • Arezki, Rabah & Djankov, Simeon & Nguyen, Ha & Yotzov, Ivan, 2021. "Reversal of Fortune for Political Incumbents: Evidence from Oil Shocks," CAGE Online Working Paper Series 572, Competitive Advantage in the Global Economy (CAGE).
    • Handle: RePEc:cge:wacage:572
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    File URL: https://warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/wp572.2021.pdf
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    References listed on IDEAS

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    Cited by:

    1. Rabah Arezki & Simeon Djankov & Ha Nguyen & Ivan Yotzov, 2022. "The Political Costs of Oil Price Shocks," CESifo Working Paper Series 9763, CESifo.

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    More about this item

    Keywords

    Elections; Incumbent; Oil Prices; Economic Shocks JEL Classification: D72; E21; P16; Q43;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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